Just when you thought airlines had run out of ideas — or the gall — to pile on another new fee, along comes Spirit Airlines.
The ultra-low-cost carrier will charge as much as $45 to put a carry-on bag in an overhead bin starting Aug. 1.
For consumers, the news Tuesday was as welcome as a fresh rash. Airlines already charge to buy a ticket over the phone, reserve a seat and get comfy with a pillow and blanket (at least you can keep those). That's on top of coughing up $25 each way for one checked bag, $35 for a second on many flights
Spirit ranks as a small fry among U.S. airlines. At Tampa International, the carrier flies less than about 2 percent of all passengers, with two daily flights to Detroit and one each to Fort Lauderdale and Atlantic City. But Spirit and Allegiant Air, the dominant airline at St. Petersburg-Clearwater International, were using "a la carte'' pricing or "unbundling'' long before big, full-service carriers caught on.
And now, Spirit is again breaking new ground in the industry's rush to make customers pay for stuff they used to get free. The big question: Will Delta, American or Continental slap a fee on carry-ons and start another stampede?
The big airlines will likely sit back and watch the reaction to Spirit, said Jami Counter, senior director of flights for the online travel agency TripAdvisor. Unlike Spirit, the majors rely heavily on business travelers, most of whom would rather part with a limb than fly without (or pay extra for) a laptop and suit bag.
"This move by Spirit may cross the line for American travelers who are already near the breaking point due to rising checked luggage fees,'' Counter said.
Former airline executive Robert Mann agrees. But airlines rely increasingly on a growing stream of cash from add-on charges, he says.
"For most, it's the difference between taking a huge loss and the possibility of a profit,'' says Mann, now an airline industry analyst. "The only way to get into black ink is through these fees.''
U.S. airlines made more than $2 billion in fees during the third quarter of 2009 up 36 percent from a year earlier. That includes checked baggage fees, reservation change fees, sales of frequent flier award miles to partners, pet fees and standby passenger fees.
Spirit says the fees make it possible to offer really cheap sale fares, often less than $10. On Tuesday, the airline launched "Penny Plus'' fares for its $9 Fare Club, which costs members $39.95 a year for exclusive fare deals.
Penny Plus means members will pay 1 cent airfare, plus a charge for fuel, government taxes and fees. A flight from Detroit to Fort Lauderdale would cost a total of $55.20, the airline said.
The new carry-on fee will allow the carrier to "continue reducing fares even further, and offering customers the option of paying only for the services they want and use, rather than subsidizing the choices of others,'' said Barry Biffle, chief marketing officer.
When the carry-on fee kicks in, Spirit will still allow passengers to bring one personal item — such as a purse, briefcase, laptop or backpack — for free. It can't be larger than 16 inches by 14 inches by 12 inches and must fit under the seat in front of the passenger.
Customers can reserve bin space for a carry-on in advance for $30 each way. The fee goes to $45 at the gate.
Travelers who paid for carry-ons will board first. Gate agents will check for travelers whose boarding passes read: No Carry On. Those with a bag will need to pay with a credit card before boarding the plane.
Spirit CEO Ben Baldanza said he's confident the airline will stick with the new carry-on fee. "Our decision to do it isn't dependent" on other carriers following along, he said. "Nobody brings their package to FedEx or UPS and expects them to ship it for free."
Steve Huettel can be reached at email@example.com or (813) 226-3384.